Annual equivalent rate (AER) the percentage cost of finance if interest was added yearly instead of monthly or even daily.
Annual Percentage Rate (APR) –Is one figure which shows the true cost of borrowing over the term once allowance is made for any discounts and set up fees.
Bailiff – A person licensed to confiscate your property to repay a debt. A bailiff must have identity on them and must have legal documents confirming a court has sanctioned them to recover goods to the value of the debt owed.
Bankruptcy is legal process where you are declared unable to pay your creditors and are protected from further claims by creditors. A bankrupt looses control over his/her assets. You can be discharged from bankruptcy within one year usually. However in return all your main assets will be sold by the Officail Receiver or Trustee to repay debs and if you can maintain a decent income you may even be forced to make repayments for up to 3 years.
Charging Order – Is an order from the court and is put against your property so that you cannot sell the property without it being repaid. It is usually applied for by unsecured creditors and in effect secures the debt.
Credit Reference Agencies – Authorised bodies which hold information on how often and with whom you have taken finance out and more importantly how you have conducted the scheduled repayments. Most lenders will refer to them when deciding on whether they will agree to any new application for finance you may make.
Consolidation Loan – A single loan which replaces the balances on all other loans or credit cards etc, with the aim of making the overall monthly repayment lower and easier to manage with one repayment date rather than having various. It can either be a personal unsecured loan or a secured loan.
County Court Judgment – A Judgment applied for by creditor to get the County Court to decide if you owe money and to agree a formal legal repayment programme. If you fail to keep to the terms of this Judgment the court can order Bailiffs to seize your personal assets to recover the debt owed. It is also recorded on your credit file and will make getting new credit much more difficult.
Default notices - A default notice is a formal letter which a lender or creditor must send you if they intend taking legal action to try and recover the debt. Don’t worry though it doesn’t mean they will take legal action and providing you make arrangement with them to repay the debt they probably won’t. Default notices do however stay on your file for six years or so and will make it harder to get credit so it's essential to deal with any you receive as a priority.
Income Payments Agreement – This is where the official receiver or trustee in bankruptcy cases ask you to agree to make regular payments from your income to your creditors for three years.
Income Payment Order – If you fail to agree to an Income Payment Agreement, the official receiver or trustee can order you to pay and tells your employer to deduct the money from your wages.
Insolvent – You are insolvent if you cannot pay your debts and cannot agre an informal repayment plan with creditors.
IVA An IVA or Individual Voluntary Arrangement is a form of insolvency which stops short of bankruptcy. It is a legally binding agreement between you and your creditors which freezes interest and charges. It is generally appropriate for people who are unable to make their monthly repayments in full but who do have some money to give to their creditors each month. An IVA allows you to pay back only what you can afford towards your unsecured creditors (the people you owe money to) over a period of time usually no more than 5 years. After 5 years you are normally able to arrange finance again.
Official Receiver – An employee of the Government run Insolvency Service who is appointed by the County Court in bankruptcy cases. Their job is to administer the bankruptcy order and deal with your creditors.
Repossession – Repossession is litigation begun in a court of the United Kingdom by a lender or landlord for purposes of recovering possession of property that is occupied by the debtor or tenant as his or her main or sole residence.
Secured Loan A loan offered in return for securing it against your property, It will only normally be offered if you already have a mortgage and therefore it is often referred to as a second charge mortgage. Unlike a personal loan the terms are normally anything between 10-30 year and the amount available can be more 5-50K
Standard Variable rated rate. The variable rate which will be applied once any introductory or fixed rate finishes.
Statutory Demand- A Statutory Demand is a formal legal document issued by a creditor who is owed money, requiring you to pay off an outstanding debt either by instalments or a lump sum or to secure it against a property. If you do not comply with the demand, the creditor may be able to apply for bankruptcy against you within 21 days.
Some creditors use the issuing of a Statutory Demand as a tactic to frighten you but they should always be taken seriously.
If you feel the demand is wrong for one of the following reasons;-
- You dispute the amount of money being stated as owed.
- The sum owed is less than £750.
- You could repay the debt
- There is a counterclaim of more than the money owed.
You should apply within 18 days to your local County Court to "set aside" the Statutory Demand.
Unsecured Loan - These are often referred to as personal loans as they are offered to you based on your income and credit rating and are not secured against your property. They will normally only be offered with terms of up to 5 years only and with a maximum amount available of £25K.
Walking possession agreement?
A walking possession agreement is an agreement issued by a Bailiff which allow goods which a Bailiff after gaining peaceful entry into your home, identifies as being of value but allows them to remain in your home and you can continue to use them providing you keep your side of the agreement, e.g. you make agreed payments.
